Product Liability and its Provisions under Consumer Protection Law


This article is written by Shruti Pandey, a student of Campus Law Center, Delhi University.

Defective and dangerous articles and products are the cause of thousands of injuries. Consumers are cheated and agitated by being provided with inferior or lesser quality goods than actually demanded or are charged with excess price. The manufacturers and service providers try to deceive the consumer in every possible way. Therefore, the legal rules concerning the liability of manufacturers and service providers and the course of action against them should be known.

What is Product Liability?

In India, Product liability has not been defined in any statute. Product liability is the ability of all the parties along the chain of manufacturing process of any product for damage caused by that product. This includes the manufacturer of component parts (at the top of the chain), an assembling manufacturer, the wholesaler, and the retail store owner (at the bottom of the chain). Products having inherent defects that cause harm to a consumer of the product, or someone to whom the product was loaned, given, etc., are the subjects of products liability suits.

While products are generally thought of as tangible personal property, product liability has stretched that definition to include intangibles (gas), naturals (pets), real estate (house), and writings (navigational charts).  In India, the Supreme Court of India itself has defined the term ‘product’ in Collector of Central Excise Duty v. Protein Products of India Ltd., as “anything produced or obtained as a result of some operation or work.” A product is the item offered for sale. A product can either be a service or an item.

In India, there is no specific statute which governs the product liability claims. However, the product liability claims could be ascertained under following Indian Statutes:

  1. The Consumer Protection Act, 1986
  2. The Sales of Goods Act, 1930
  3. Specific statutes pertaining to specific goods

Provisions under the Consumer Protection Act, 1986

The Consumer Protection Act has laws surrounding a manufacturer’s and supplier’s liability for defective products. Subject to some exceptions, the Act holds any producer or importer, distributor or retailer of any goods liable for any harm caused wholly or partly as a consequence of:

Irrespective of whether such harm resulted from any negligence on the part of the producer, importer, distributor or a retailer.
For the purpose of this Act, a supplier of services who applies, supplies, installs or provides access to any goods, will be regarded as a supplier of those goods to a consumer. If more than one person is liable to a consumer, their liability is joint and several.

Are there any exceptions to the liabilities of a manufacturer or supplier?

There are certain exceptions to the strict liability imposed under this act. Some of these exceptions include the situations where:

Consumers may claim under this Act for harm which includes death, injury or illness to any natural person, any loss of or physical damage to any property, and any contemplated economic loss that results from that harm.

The implications of the Consumer Protection Act for entities forming part of the manufacturing process or the supply chain appear to be quite severe. Furthermore, a supplier may not deprive a consumer of any right in terms of the Act.

Who can file a Consumer Suit?

The Consumer Protection Act provides that a consumer itself; any voluntary organisation registered under The Companies Act, 1956 or under any other law for the time being in force; the Central government or State government or one or more consumers (where there are numerous consumers having same interest) can file a complaint under the Act.

Besides them, any person who is a beneficiary of the goods or services, legal representative or legal heir of the deceased consumer, husband or relative of the consumer can also file a complaint.

Can the complaint be filed without hiring the services of an Advocate or lawyer?

Yes. The consumer protection Act has provided a very simple procedure to file the complaint that even a person from non-legal background can file the complaint on its own. There is a nominal fee to be paid in form of a crossed demand draft drawn on a nationalized bank or through a crossed Indian Postal Order in Favour of the Registrar of the State Commission & payable where it is situated.  But the complaint has to be filed within two years from the day the deficiency in service or defect in goods has arisen/detected, however this is not a strict rule, in certain circumstances if you are able to satisfy the court the reasonability in the delay causing the case can still be taken up.

How to file a consumer suit?

In cases where the value of goods and services involved is less than Rs. 20 Lakhs in value, the complaint has to be filed with the District Forum constituted in the specified districts of a State. In cases where the value of goods and services involved is more than Rs. 20 Lakhs in value but does not exceed Rs 1 Crore, the complaint has to be filed with the State Commission constituted in the capital cities of the different states and where the value of goods and services involved is more than 1 Crore then the complaint is to be filed with the National Commission which has been constituted in New Delhi.

To file a complaint, firstly, the jurisdiction of the complaint is determined by the facts of the case and where the cause of action arises. The area in which the opposite party resides or carries on his work or business will also have to be taken into consideration by you. If you file a complaint against a service provider for a sum below 20 Lakhs, the District Forum in the jurisdiction where the cause of action arose is to be approached. If the matter is above 20 Lakhs but below 1 Crore then complaint has to be filed with the State Commission within which State the trader/ service provider/ manufacturer resides or works in.

A prescribed fee along with the complaint before the District Forum, State Commission & the National Commission as the case may be, has to be paid. The complaint should state the facts necessary to establish a cause of action. The name, description and address of the complainant and the name, description, address of the opposite party/parties against whom relief is claimed has to be mentioned. Also, put on record the copy of the bill of the goods bought, warranty and guarantee documents and also a copy of the written complaint and notice made to the trader requesting him to rectify the product. Complaint must clearly state as to what relief is sought against the opposite party. An affidavit along with the complaint that facts stated in the complaint are true and correct.

Online Complaint Procedure

In case any person has consumer grievances against a company or service provider an online complaint can be filed at http://www.nationalconsumerhelpline.in/ComplaintFile.aspx